Under promise and over deliver for Landore?
“…Prospective investors should take time to review the detailed drilling updates Landore has put out through the summer, which record dozens of commercial-grade intercepts. It’s worth noting that the tone of the company’s announcements is, by today’s standards, somewhat understated…”
Gold, nickel, copper and PGE miner Landore Resources (AIM:LND), last covered in June, has continued to make quiet progress this summer towards unlocking the value of what may prove to be a multi-million gold resource in the Canadian province of Ontario. The company’s latest updates say it hopes to be able to publish updated mineral resource estimates later this year.
For investors new to the Landore story, the miner’s primary asset is its 100pc owned Junior Lake Property, which together with the contiguous Lamaune Iron Prospect (90.2pc owned), covers a 30,507 hectare site with good links to Thunder Bay, the main supply hub for Ontario’s miners.
Although the company’s current drilling programme is focused on the Property’s flagship asset, the BAM Gold Deposit, it is worth noting Junior Lake is prospective for a variety of minerals, including nickel, copper, cobalt, lithium and PGE metals. Historic drilling at the B4-7 Nickel-Copper-Cobalt-PGE Deposit and Alpha Zone, some 600 metres southwest of the BAM Gold Deposit, found polymetallic nickel-copper-cobalt-platinum-palladium-gold mineralisation, the most recent resource estimate stating 3,292,000 tonnes at 1.20pc Nickel Equivalent (NiEq) in the Indicated category, and 568,000 tonnes at 1.26pc NiEq in the Inferred category. Exploration was paused following the 2012 commodities crash – and the possible extent of the BAM Gold Deposit became clear – but earlier this year Landore said that in light of the energy transition’s increasing demand for battery metals ‘the Board considers these projects to be viable once again’.
The company also owns or has the mineral rights to eight properties covering 99 claims in Nevada, and is entitled to a 1pc net smelter returns royalty from the West Graham property located in the Sudbury Nickel Belt after selling its interest in the licence earlier this year.
The Junior Lake campaign
But for Landore 2021 has been all about Junior Lake. The Property’s known mineral resources and prospects are located within an Archean-age greenstone belt some 0.5 to 1.5 kilometres wide and 31 kilometres long. The BAM Gold Deposit is situated within a 2.7 kilometre geophysical anomaly midway along the belt. The most recent Mineral Resource Estimate (MRE) for the Deposit, published last January, reported a resource of 31,083,000 tonnes at 1.02 g/t for 1,015,000 oz gold, including 21,930,000 tonnes at 1.06 g/t for 747,000 oz gold in the Indicated category. Target areas adjacent to the current delineated deposits offer a possible 14,761,000 tonnes at 0.93 g/t oz gold, and a further 441,000 oz in the ‘Unclassified’ material category. The Deposit remains open in several directions, with metallurgical test work indicating that gold recoveries may run between 97pc and 99pc, which would facilitate efficient operating conditions.
Landore raised £2.8m last July and a further £3.5m this February to cover its current drilling programme, which began last October with the aim of expanding the BAM Gold Resource and exploring westwards along strike for several kilometres to identify new gold trends. Exploration will inform an updated Mineral Resource Estimate (MRE) and Preliminary Economic Assessment (PEA), which the company hopes will upgrade the resource’s Inferred mineralisation to Indicated status.
Prospective investors should take time to review the detailed drilling updates Landore has put out through the summer, which record dozens of commercial-grade intercepts. It’s worth noting that the tone of the company’s announcements is, by today’s standards, somewhat understated, with some of the more significant details not always immediately apparent. So read carefully! We offer our interpretation of the company’s progress here.
Progress at Junior Lake
Landore posted its most eye-catching update in April, reporting that ‘bonanza grade gold’ of 432.0 g/t over 0.32 metres had been intersected in drill hole 0421-785, in the footwall below the currently defined East pit of the BAM Gold Deposit (bonanza grade is an industry term for the discovery of more than 34 grams of gold per tonne or one troy ounce of gold per tonne). The intersection offered up-to-date evidence of the Deposit’s potential, which had yielded a bonanza grade discovery four years ago, of 37.40 g/t gold over one metre, some 200 metres from the latest discovery, and in the same deformation zone.
The following month Landore reported that 20 holes covering 4,700 metres drilled to test for potential strike extension to the west of the Deposit had intersected ‘typical BAM Gold Deposit lithology and mineralisation’. And in June the company stated that 19 holes testing for depth and length extension of the Deposit’s East pit had encountered visible gold. Highlights included drill hole 0421-789, which intersected 53.37 metres at 1.35 g/t gold, including 13.14 metres at 2.99 g/t gold.
In July drilling intersected high grade gold in the vicinity of the bonanza grade quartz vein in drill hole reported in April, with drill hole 0421-793 reporting 0.61 metres at 29.40 g/t. Drilling results confirmed wide, relatively shallow zones of ore grade gold mineralisation within the East pit’s hanging wall, ‘substantially enhancing the existing defined resource’. Drill hole 0421-793 reported 15.09 metres at 1.75g/t gold, and 0421-796 18.47 metres at 0.87g/t gold.
A further update late last month said that additional step out and infill drilling within the exploration area for 800 metres to the east and along strike of the BAM Gold Deposit had continued to intersect widespread ore grade gold. Looking back on progress to date, the announcement reported that the 2020-21 campaign, designed to complete 23,000 metres, had so far drilled a total of 21,733 metres across 94 holes. The company has engaged Cube Consulting of Perth Western Australia to complete the MRE and PEA updates, expected in ‘Q3 2021’. The update did, however, include a less positive note, saying that the forest fires that have raged through Canada this summer had forced the company to suspend drilling at the beginning of August. Drilling will resume in mid-October at Felix, an exploration area to the west and along strike of the BAM Gold Deposit.
An August lull?
In its most recent annual report, published in June, Landore stated a loss for the year ended 31 December 2020 of £2,553,556 (2019: £2,145,920). But it is funded for its current exploration programme, and is debt-free.
Landore’s share price rose sharply at the start of the year as its drilling programme gained momentum, soaring from 20p to just under 40p through January. It then see-sawed between 30p and 40p before stabilising around the 30p mark in June. The price subsided during August, its recession to around 25p perhaps reflecting concern about the impact of the forest fires on operations, and ongoing uncertainty regarding the price of gold, frequently discussed in TMS articles, most recently our report last month on Panther Metals.
And as noted above, Landore’s laconic communications style tends if anything to underplay the company’s progress. That reticence, somewhat refreshing given the notorious tendency of natural resource small caps to overstate, may of course be taken as a positive sign of quiet confidence, and genuine commitment to the patient unlocking of the company’s assets. With the prospect of a resumption in the next few weeks of what seems to have been a solid drilling campaign, and updated MRE and PEA reports on the horizon that are likely to confirm an upgrade of what appears to be a highly prospective licence, we continue to consider Landore to be one of AIM’s brighter mining prospects, and certainly well worth checking out at its current price.